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Old 12-28-2007, 07:42 AM   #101
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O.K. That made my head hurt.
Yeah...my brain is really killing me now!
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Old 12-28-2007, 08:44 AM   #102
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Not sure exactly, I am 34 yo, and have 140k in my accounts, plus 20k in wife's accounts at present time. All signs suggest retirement at age 60 is a forgone conclusion (with 2 M account value). This assumes we contribute nothing from this point forward.

Adding to the accounts increases probability of FIRE.

Current goal is 360k by age 39 (5 years to get there). 360k by age 39 suggest we reach the 2 M goal at age 52, not age 60.

I have a spreadsheet which I use to track milestones. Uses rule of 72 and goes like this

list age you want to retire in one column. List amount needed next to it in adjacent column. Using rule of 72, divide return rate into 72 (8% return=9, 10% return =7.2 etc...)
in cell below age, subtract age by number above, and divide the goal in half. in next row repeat. in next row repeat.

might look like this:

age 60 goal $2,000,000
age 52 goal $1,000,000
age 44 goal $500,000
age 36 goal $250,000
age 28 goal $125,000

this is assuming a 9% return (money doubles every 8 years)

you could also reverse the chart

age 31 amount 60k
age 38 amount 120k
age 45 amount 240k
age 52 amount 480k
age 59 amount 960k
age 66 amount 1,920k
this assumes a 10% return (money doubles every 7 years)


These charts serves 3 purposes
1) shows me when compounding will give me money needed
2) shows me if current actions are in line with goals- allocation wise-meaning make sure I have an allocation which can reach the goal.
3) shows me if return can be ratched downward and allocation adjusted to more conservative position

You could also set the goal of 240k invested by age 38, which suggests you reach 1.920 M goal at age 59 (7 years sooner).

On the chart I reference, I have columns for 7%, 8%, 9%, 10%, 11% and 12% returns. The retirement age is the same, the difference is seeing which age ranges I need a 9-11% return, and when I can ramp allocation down to something resembling a 7% return.
Are you an engineer??
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Old 12-28-2007, 09:15 AM   #103
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jIMOH,

Does your spreadsheet consider inflation?
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Old 12-28-2007, 10:16 AM   #104
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And all this time I thought Rule of 72 was just for computing an approximate figure in my head.
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Old 12-28-2007, 09:13 PM   #105
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I was 31 in 1990. We had about 200K back then. I made 29K, my wife made 31K.
Today we have about 2.7M. I make 102K and my wife make 105K. It's been a fun, but bumpy ride.
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Old 12-28-2007, 09:19 PM   #106
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My net worth was about 157k when I was 31. Took another 6 years to pass $1,000,000.
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Old 12-29-2007, 09:41 AM   #107
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dmpi and chrisdut,

I'm inbetween where you two were at 31. How in the world did you to get where you are 17 and 6 years later. To me, that's amazing. Other than IRA's and 401k's?

Please advice a fellow 31 year old.
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Old 12-29-2007, 01:29 PM   #108
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dmpi and chrisdut,

I'm inbetween where you two were at 31. How in the world did you to get where you are 17 and 6 years later. To me, that's amazing. Other than IRA's and 401k's?

Please advice a fellow 31 year old.
I started getting serious about saving about the time I became 30. Since then, I have saved about 30 percent of my income. I also became a partner at the engineering firm where I work. Roughly half of my net worth is my equity in the company.
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Old 12-29-2007, 03:57 PM   #109
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At 31, I had a negative net worth (student loans). I was really not interesting in saving or investing. It wasn't until after I bought a house that I started saving, which was when I was 35.

It will take my partner and I 20 years to hit the million mark.

I'm not sorry I didn't save in my 20's, but I wish I had started at age 30.
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Old 12-29-2007, 07:30 PM   #110
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Had about 115K in retirement at 31 (401K + IRA), it's up to around 200K now (at 34)
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Old 12-29-2007, 09:23 PM   #111
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Age 31 for me was in 1983. I had two kids and a spendthrift wife. We lived in credit cards and had maybe $2000 in investments but with $90k in debt (mortgage, car loans and CC debt. We were living "off shore" at the time and my ex-patriot COLA was all that kept us out of serious trouble with bills.

Age 39. Divorced with one kid. DW got most of the profit from the house sale. I got the CC debt and lost half my retirement 401k to her. Good thing it was peanuts at the time.

Age 42. Remarried.

Age 50. Retired from a Megacorp after 24 years in various management jobs with NW in seven figures. Moved and took a new job that lasted longer than I had planned due to some personal issues.

Age 54. Retired again and have no intention of ever going back.

At the time of my divorce I had over $100k in debt and very little in assets. It took me 3 years to get out from under it and to start investing. Once I was clear of debt payments I stashed all I could in savings and retirement accounts. Despite some set backs in 1999-2001 (lost 1/3 of retirement accounts and after tax portfolio), we still managed to ER with enough $$$ to live on for as long as we need it.

I applaud those of you in your 20's and 30' who have stayed out of debt and have saved and invested for your future. Doing it all in less than 15 years is very painful and takes a strong commitment to do so. Had I been able to do so earlier the path would have been much easier and some of my life choices would have allowed me more family time.
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Old 12-30-2007, 01:23 AM   #112
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Age 31 was 9 years ago for me. I was broke, with about 10K in debt, but finished with my graduate degree and just had a new job with megacorp. I came to the States 16 years ago (24yo) with 400 dollars in my pocket, from which I had to spend $200 for a cheap pension in order to sleep indoors . My first 7 years were a struggle to pay for rent and school.
Now I'm 40, married with 2 kids, still with megacorp, and about 350K NW (excluding RE). The best part is that I'm training for a marathon in a couple of months, and I was a consumate smoker untill 10 years ago and @ 230 pounds a bit "plump".
15 years to go for me
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Old 12-30-2007, 11:53 AM   #113
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tzukulika, that is an amazing story. Thanks for posting.
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Old 12-30-2007, 03:31 PM   #114
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dmpi and chrisdut,

I'm inbetween where you two were at 31. How in the world did you to get where you are 17 and 6 years later. To me, that's amazing. Other than IRA's and 401k's?

Please advice a fellow 31 year old.
Sorry. I donít have any real secrets for building wealth. But looking back, I had a few lucky breaks. First I managed to get a college education without going into debt. Back then you could fund your education by just working thru the summers and pinching pennies as a poor college student. With the cost of education today, this is no longer possible. Second after getting my degree and subsequently a real job, I lived with my parents without paying rent for a number of years while I save up for a down payment for a house. I bought a rather modest home by today standards.
After getting married in the early 90s we managed to put our savings together and manage to pay off the debt we owed on the house. From there we lived debt free. We choose a standard of living far below what are combined income could have allowed. This allowed us to invest what we didnít spend. First we maxed out our 401Ks and put after tax money into CDs. Then in the mid 90s we decided to invest in equities. As the CDs matured we took the proceeds and bought mostly S&P500 index funds. Back then, we had an asset allocation of roughly 70% equities & 30% fixed income and bonds. This put us on a roller coaster as the dot-com frenzy came and went. As the years went by our income continued to grow. However we never let our growing wealth go to our heads, we were satisfied with our standard of living and we continued to save and invest our money. As time went by we slowly increased our allocation of equities to about 90%. Since we lived off a small percentage of what we made we felt that we could handle more market risk. The logic being; even if the market crashes, we can still live the same. In 2004 we decided to diversify our portfolio to include international funds which now consist of about 25% of our portfolio.
To sum it up here is my tips for building wealth: Get an education and a good job. Marry someone who willing to live modestly. Live in a small home. Get rid of all debts. Live under your means and invest the difference in equities. Buy and hold equities to minimize taxes.
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Old 12-30-2007, 04:46 PM   #115
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I was a stay at home daughter or full time caregiver for my mother. One of the benefits of LBYM and being debt free (well I deferred my student loans) was the option of leaving full time employment to be of service to my mother for several years. Financially - it means that ER has been delayed for a few years but it was, without doubt, one of the best decisions I've ever made.
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Old 12-31-2007, 09:06 PM   #116
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To the OP, Bright Eyed:

At 31, we had virtually no savings but some rental properties we purchased and managed. We didn't start funding the 401Ks until about age 33 or 34.

Anyone starting at age 31 to take savings and LBYM seriously is way ahead of the game. I remember when we first started saving that it sounded impossible that we would ever accumulate anything like $500K. If you're doing sound planning, you'll start to see your projections being met or exceeded each year and will start trusting the numbers.

I use conservative estimates for market returns (6%) and for projections of future income and then at the end of the year (today!) I am happy to report that I exceeded my projections for the year and continue to be on the path to FI.

Keep it up and you'll be there before you know it!
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Old 12-31-2007, 09:21 PM   #117
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Originally Posted by dmpi View Post
Sorry. I donít have any real secrets for building wealth. But looking back, I had a few lucky breaks...

As the years went by our income continued to grow. However we never let our growing wealth go to our heads, we were satisfied with our standard of living and we continued to save and invest our money....

To sum it up here is my tips for building wealth: Get an education and a good job. Marry someone who willing to live modestly. Live in a small home. Get rid of all debts. Live under your means and invest the difference in equities. Buy and hold equities to minimize taxes.
Doesn't sound like luck to me at all. Great job and great story
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(49, married; DH 53. I am fully retired as of 2015 (well ok, I still work part-time but only because I love the job and have complete freedom to call off if I want to travel with hubby for work), DH hopes to fully retire 2018 when he turns 55 to access 401K penalty-free...although he may decide to do part-time consulting)
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Old 01-01-2008, 03:24 AM   #118
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I was 31 in 2001. Start of that year our portfolio of stocks and 401K was worth nearly $1M. I had been saving, scraping by, and investing in stocks since college graduation at age 21.

I did not earn it the "fast way" but like everyone at the time, but mistakenly, we followed the herd into high tech investing through the mid and late 1990's. I was working in related high tech industry anyway so it was natural that was THE place to invest.

But, the Dot com and related technology industry crashed.
I exited the year worth less than $200K,

mind you, I was also very depressed, with a young family (2 kids) and plans totally dashed for ER by age 40; I just could not convince myself to sell month after month as things continued to crater. I was a dumb sh1t.

7 years later, we're still not yet recovered financially, and I honestly think the whole experience made me FAR too conservative of an investor. Had I been aggressive AFTER the crash, I'd have probably made some money back - but we hit the sidelines at the market bottom and been struggling since.


On the flip side, I learned:

1. that there is more to life than money in the bank, that all the money in the world cant buy happiness or health, and

2. that you MUST keep things in perspective... that I LOST more than most people twice my age had. and that even my small remaining balance was probably double what my peers had.

3. Diversification is important, and it is impossible to time the market.

4. Making money may build character, but LOSING that same money builds even more character.

I was always frugal, but this experience further emphasized the need. I also realized it will take far less to make me happy in retirement. I laugh at all the "name brand prisoners" who are tied to the yuppie, uppie, lifestyle, keeping up with the Jones's and all that nonsense. LBYM is an attitude as much as a lifestyle.

Good luck to us all.

My goal is still to ER by age 45....not FIRE...but ER...and go into a 2nd career that does society some good.
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31 in 2005
Old 01-01-2008, 10:04 AM   #119
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31 in 2005

Well, I was 31 just a few years ago, so I know it wasn't a drastically different situation than what I am in now. HH income around 200k and a net worth around 500k. I'm hoping to retire "as soon as I can" . . .

I stumbled across a blog for someone with similar tastes, thought I'd share it here: musings on personal finance . . . maybe someone here will find it interesting, too.
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Old 01-10-2008, 01:17 PM   #120
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Hmmmm... that was just a few years ago....

I was about:
8k less on current income
30K less on current 401K
8K less on current Roth
30k less on current saving account
75K more on current home equity
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